Intel Chief Executive Brian Krzanich, who has served as head of the chipmaker for less than one year, was asked on Wednesday about his company's relationship with Apple, and responded that the two parties continue to "grow closer" as time progresses.

Krzanich took part in an Ask Me Anything question-and-answer session on Reddit, in which he was asked about a range of subjects related to his position at Intel, where he has been CEO since last May. One user asked Krzanich how close Intel's relationship is with Apple, and if it has changed since the company moved its Mac lineup to Intel processors nearly a decade ago.

"We've always had a very close relationship with Apple and it continues to grow closer," Krzanich shared. "Sure (it's) grown close over the years, especially since... they started to use our technology in their systems."

"We've always had a very close relationship with Apple and it continues to grow closer." - Intel CEO Brian KrzanichThe CEO went on to explain that Intel is always trying to forge a closer relationship with its partners. He shared a bit of advice from former Intel Chief Executive Paul Otellini, who told him that the company wins when its end customers win.

Intel is the largest semiconductor maker in the world, providing the central processors found in most Windows PCs as well as all of Apple's Macs. But while Intel is the exclusive chipmaker for the Mac, the company has had a sometimes contentious relationship with Apple.

That's largely stemmed from the fact that Apple uses ARM-based processors, and not Intel silicon, for its wildly popular iPhone and iPad lineups. Otellini revealed last year as he exited Intel that his company had the opportunity to be a part of Apple's first iPhone, but that he decided against moving forward with what would have been a winning bid.

Spurned by Intel, Apple instead turned to Samsung, which has built all of the processors for Apple's iPhone and iPad to date. But Samsung has also in the subsequent years become a major competitor to Apple, which has fueled speculation that the iPhone maker is looking to move its chip production away from Samsung.

And with ARM-powered smartphones, tablets and other devices flooding the market, Intel partner Altera will begin manufacturing third-party ARM chips this year. Industry watchers view the move as a major decision, as Intel's own Atom chips are intended to compete with ARM-based processors like Qualcomm's Snapdragon and Apple's A-series CPUs.

That's helped to fuel speculation that Intel could begin building custom ARM chips for Apple in the future, as the Cupertino, Calif., company looks to lessen its reliance on competitor Samsung.

Beyond Apple, Krzanich was also asked on Wednesday whether he uses any wearable technology, an emerging market many expect to see significant growth this year. In response, the Intel CEO revealed that he currently uses two devices, one of which is an internally developed Intel device that he can't disclose any more details about.

The fact that Krzanich wears the device apparently on a daily basis may suggest that Intel has a near-finished wearable device it could launch this year. Numerous rumors have suggested Apple will launch a wrist-worn, fitness and health focused "iWatch" this year.

On the wearable front, Intel has invested in heads-up display maker Recon Instruments, and is also sponsoring an innovation challenge to bring wearable technology to life over the next year. Last year, the company also announced the Quark, an embedded processor that it hopes will fuel the next generation of wearable devices.

2018: Apple buys Intel; all chips designed and manufactured in-house. All deals with other companies terminated. (wishful thinking)

Apple buying Intel won't happen. Apple has no desire to make money on everyone else's mainline chips (and ceasing production is stupid for a zillion reasons). What Apple can do is have Intel build it's A-class ARM chips instead of Samsung. I'm sure Apple would love that but Intel still would have to get over being just a chip-fab for a competitor's technology.

How about just one? They’ve done it for all their other component companies.

It is true...they have terminated agreements with other companies after acquisitions. The most important one I can think of was PA Semi which was doing stuff for the military. And that gets into the heart of why you just don't buy Intel's business to shut it (mostly) down. First, you'd throw a tremendous number of people out of work in the United States during a period where Apple has pledged to bring jobs back to these shores. Second, products with Intel chips have a tremendous amount of dollars that go straight into the country's trade deficit due to exports. There's national security interests as well. And of course there's the immediate impact to the bottom line of thousands of companies that depend on these chips, big and small. I could go into further detail, but you get the idea...it would be crazytown. The Justice Department wouldn't allow it. People would be at Apple's doorstep with pitchforks.

You're implying that Apple-owned Intel would terminate all agreements except for that Apple needs. That's silly. First, just think about how many fab plants, operations, R&D and everything else Intel spends money on. Apple's piece of the customer pie is small (despite the fact they are one of Intel's single biggest customers). If you shut down all that stuff, then the cost to produce what Apple needs would skyrocket just due to the fact that Intel's profits are dependent on the scale of operations. Reduce that scale and cost of doing business is thrown out of whack.

You're implying that Apple-owned Intel would terminate all agreements except for that Apple needs. That's silly. First, just think about how many fab plants, operations, R&D and everything else Intel spends money on. Apple's piece of the customer pie is small (despite the fact they are one of Intel's single biggest customers). If you shut down all that stuff, then the cost to produce what Apple needs would skyrocket just due to the fact that Intel's profits are dependent on the scale of operations. Reduce that scale and cost of doing business is thrown out of whack.

They would, just not as many. According to Gartner and reported on this website, Apple now has a market share of 13.7% in the Intel PC space. So that means that 86.3% of Intel's products are sold to other companies. Intel might have 10 fab plants producing that. Apple might barely need one of those plants, and I doubt all of what Apple's buys are made in the same place anyway.

Intel's chips may not be in phones or tablets, but they pretty much are everywhere else. Business PCs (and servers), home PCs, cash registers, vending machines and kiosks, dedicated medical equipment, automotive, aviation, defense, space exploration...this is so obvious I shouldn't have to list it.

Seriously, read a book on Economics, specifically operations. This isn't rocket science, just MBA stuff.

At the very least, the MBA line going ARM is not absurd. I welcome it.

I don't see that happening. Complete waste, and for what? So Apple could save a few dollars designing their own chip and the end user gets an extra hour of battery life out of a dumbed down MBA? People buy Airs to get a real Mac that runs Mac software, or sometimes Windows too. Sure Windows 8 can run on ARM, but probably not on custom made Apple A-Series chips. How many years before you would get Adobe CS on ARM? Or any of the premium titles that business users need like Office, Intuit, AutoDesk, for that matter? And what about games? A Mac Book Air on ARM would be a crippled disaster. The sales numbers just don't justify the investment for developers, and Mac sales are shrinking anyway so you would probably never get any third party software.

I’m really not sure what part of wishful thinking was unclear, but you realize that in a world where Intel doesn’t serve any company but Apple that Apple would grow as a company, right?

Uh, no. Let's just play your game that Intel just disappeared tomorrow. What would happen? Outside of panic in the tech world and a huge stock market crash (I wish I were kidding), the most immediate winner would be AMD since everyone would flock to them to get their chips. Since AMD doesn't have Intel's fab capacity (or depth of products, or performance), chip prices would skyrocket until market forces equalized, probably in two years. Not to mention every body who owned a chip fab would probably get into the business and virtually all of those companies are in China, Taiwan or Korea. Not good for the country's GDP.

At the very least, the MBA line going ARM is not absurd. I welcome it.

The A7 has about 50% the computing power of the Macbook air core I5.

The Arm processors are are great mobile chips (phone/tablet) because they don't consume much power. If you're willing to pack around a one pound battery then the ARM looses that advantage. Of course if you want a Macbook air that can go a week without recharging then I suppose an ARM chip might be appropriate but you will have to give on performance.

Uh, no. Let's just play your game that Intel just disappeared tomorrow. What would happen? Outside of panic in the tech world and a huge stock market crash (I wish I were kidding), the most immediate winner would be AMD since everyone would flock to them to get their chips. Since AMD doesn't have Intel's fab capacity (or depth of products, or performance), chip prices would skyrocket until market forces equalized, probably in two years. Not to mention every body who owned a chip fab would probably get into the business and virtually all of those companies are in China, Taiwan or Korea. Not good for the country's GDP.

Not to mention that Apple has already made it very clear that they don't want to own ANY factories.

Not to mention that Apple has already made it very clear that they don't want to own ANY factories.

A legacy of Tim Cook, who eliminated Apple's owned factories by early 2000s. Other providers were better at it and it gives Apple more flexibility to adjust for product/market shifts. Even the new Sapphire plant in the US is owned by someone else (same for the Mac Pro plant).

A legacy of Tim Cook, who eliminated Apple's owned factories by early 2000s. Other providers were better at it and it gives Apple more flexibility to adjust for product/market shifts. Even the new Sapphire plant in the US is owned by someone else (same for the Mac Pro plant).

Quote:

Originally Posted by mstone

Not to mention that Apple has already made it very clear that they don't want to own ANY factories.

Both facilities are fully subsidized by Apple. In essence, they own them and all the staff and equipment inside, minus the business legal obligation of managing them for Tax purposes.

I've read some recent analysis into the potential of Apple and Intel extending their relationship and it looks promising. Intel has more capacity than they can use and I am hoping Apple and Intel collaborate to bring those fabs online. The less Apple is dependent on Samsung, the better.

I wouldn't be surprised if Tim Cook talks to Intel frequently telling them that he'd love to use Intel chips in the iPads and iPhones if they were as good as ARM. Intel is certainly kicking itself for missing this boat. Apple probably sends them specs and says "match this power level, performance, price", etc. and Intel fails to do so year after year.

Apple doesn't buy big companies like Intel or ARM. They buy little companies and roll out their tech years later after maturing it in house. Apple doesn't pay billions, they pay millions for other companies and their IP.

Except that’s not what I said, but you’re clearly incapable of postulating from a single point of divergence.

What makes you think that?

Yet, which is why I said 2016.

There never will be. Intel isn't gaining on AMD or Nvidia in terms of GPGPU and more, especially AMD. AMD is augmenting their entire line of traditional CPUs and GPUs for HSA.

We just got Kaveri APU and it's just for show. The first beast is Excavator APU for both Opteron and desktop. Think of the replacement to the Nov '13 released AMD Radeon R-290X merged with the next generation Excavator CPU core architecture set running at 20nm/14nm FinFET by the end of 2014 whose performance per watt mirrors Intel, whose Parallel performance dwarfs Intel and whose Integer performance is a wash.

AMD will be several billion dollars more financially secure by the end of 2014, and having secured the gaming world for the next 7 years will be introducing a wide variety of solutions that forces Intel to deal with both AMD and ARM.

Sorry, but Intel is still playing 2D chess. AMD has reinvented itself with 3D chess going forward. It doesn't have to defeat Intel. It's got options with other parties owning the most lucrative space of all: Embedded lifestyle devices.

Intel will never break into it as all the big players make their own designs and use other fabs to stamp them out.
Then absorb the notion that

Except that’s not what I said, but you’re clearly incapable of postulating from a single point of divergence.

What makes you think that?

Yet, which is why I said 2016.

Uh, that is what you said. You speculated on a future where Apple buys Intel and then shuts down production of everything except what Apple needs. That is practically saying that Intel ceases to exist for the rest of the world that uses their products. Did I miss something?

Intel Chief Executive Brian Krzanich, who has served as head of the chipmaker for less than one year, was asked on Wednesday about his company's relationship with Apple, and responded that the two parties continue to "grow closer" as time progresses.

Except that’s not what I said, but you’re clearly incapable of postulating from a single point of divergence.

Originally Posted by mstone

Not to mention that Apple has already made it very clear that they don't want to own ANY factories.

What makes you think that?

Originally Posted by mdriftmeyer

There is nothing custom with Intel Graphics.

Yet, which is why I said 2016.

I don't think the issue is with Sevenfeet being incapable of "postulating from a single point of divergence.". You asked him for just one reason it wouldn't happen and Sevenfeet has given you several rational reasons that you refuse to accept. His point was that if the deal you proposed (Apple buying Intel and canceling production for everyone else) actually happened Apple would 1) not need the capacity of the previous entity. 2) retain only the portions of the previous entity that provide a benefit to Apple. This would lead to roughly 80% of the current Intel being sold off or liquidated. Apple would likely retain Intel's IP, one or two of Intel's fabs, and a portion of it's best engineers and leadership. The rest would as Sevenfeet put it, vanish. That roughly 80% would "vanish" into newly made competitors like AMD, Samsung, TSMC, etc. Let me position this in a somewhat different reason.

Apple buying Intel just doesn't make good business sense. The reasons Apple would want to buy Intel (Adequate Production Capacity, Intellectual Properties, and Experience) would cost less to simply build their own facility and use the design experience they obtained from PAsemi or license IA from Intel. It doesn't make sense to buy an entire company to obtain 20% of it. This also is ignoring another factor they also gave which is economies of scale. The fact that Intel has that level of volume allows it to produce chips cheaper than the subsequent division of Apple. There are better ways to accomplish what Apple would seek to gain from such a deal. For example Apple could simply invest in a large portion of Intel allowing it to gain some seats on Intel's board of directors. They could also buy a majority share effectively giving them control of the company without needing to purchase the entire entity. Also Apple doesn't need to buy Intel to have Intel continue to make chips for their Mac's and so far there has been no compelling reason to switch to an IA based mobile chip for iPhone and iPad. Apple's own ARM based designs are solid performance in a very good power envelope.

Lastly I'd like to add what I see as "Wishful Thinking". I wish that Intel would recognize their need to adapt their strategy to mobile where they do not have a dominant position. I believe they are finally seeing the potential of opening their fabs to select partners for non-IA chips. Should Intel decide to be a fab for Apple's own chip designs I think we could see a very big benefit for both companies (and us as consumers).

Intel's expertise in R&D for process technology is second to none. Simply putting Apple's current chip designs on a leading edge Intel process would yield a performance gain and power reduction. However give Apple's chip designers the freedom to build for such a process and I believe it would give Apple a competitive advantage. This would obviously benefit Intel as they would quickly gain a large share of the mobile space. This is the "Wishful Thinking" that I believe is both possible as well as making business sense for both parties.

I'm hoping they jointly announce this in the fall at the iPhone event because I need to upgrade from my iPhone 4S. :)

How about just one? They’ve done it for all their other component companies.

When did Apple buy Qualcomm and cease production for all other companies? Did Apple also buy Sharp and stop producing LCD's for all other companies? Did they also buy Hynix, Toshiba, and Sandisk and cease production of nand for all other companies? Did they buy Broadcom and Texas Instruments and cease production of touch controllers for all other companies? Did they buy Sony and stop producing camera modules for all other companies? I don't think they have actually "done it for all their other component companies."

How about just one? They’ve done it for all their other component companies.

Again, wishful thinking, but come on.

you wrote: They have done IT (purchasing a component company and ceasing production for others) for all their other component companies.

Quote:

Originally Posted by PopinFRESH

I don't think they have actually "done it for all their other component companies."

Please tell me you understand that none of what you have written is relevant in any capacity. You need to read posts before replying.

I listed several of their major component companies that they have not purchased and ceased production for others. I'm pretty sure that is directly relevant to and in direct contradiction to what you said. You need to get a grasp on reality before replying.